Sunday, 14 October 2012

Cadbury And Oreo: The Benefits Of Combining Strengths

Sometimes, when long-established brands are failing to command the sales, a wise marketing
strategy is to use the time-honoured philosophy of ‘strength in
numbers’. Mondelez International, the snacks company spun out of Kraft
Foods which owns the much-loved British brand Cadbury, is one of the
latest examples of this method in action. It has created a new chocolate
bar combining Cadbury Dairy Milk and the US brand Oreo.

The
new bar, called ‘Dairy Milk with Oreo’, is now available and yours for
just £1.42 per 120g. It consists of a milk chocolate bar containing a
creamy filling with Oreo cookie pieces – thus combining the elements for
which each brand is most famous. It is expected that there will be a
significant marketing investment in this new product over the coming
months.

This kind of combination approach works
because the holding company is already one step ahead in terms of
marketing. In this case, the holding company Kraft does not have to
establish an entirely new concept but is instead trading on the existing
popularity and renowned quality of Cadbury and Oreo. But the
combination is a clever twist as it allows consumers to look at each of
these brands in a new way. In one stroke, the manufacturer has managed
to rejuvenate the images of both brands and get a new product launch off
to a flying start.

Kraft has already seen some
success with this strategy, when in March this year it launched a new
product to rival the global giant Nutella – a combination of its
Philadelphia cream cheese spread and Cadbury’s chocolate. It has even
customised this product to suit individual market tastes. In Germany,
for example, the cream cheese is mixed with the highly popular Milka
chocolate brand.

It could be said that
confectionery producers in general need to find new ways to generate
interest in their brands right now. Annual sales of chocolate bars fell
by over six per cent over the past year. This may perhaps be down to
increased awareness of the need for healthy eating, or perhaps to
growing costs of ingredients such as sugar, corn and cocoa.

Added
to this, it is well known that the Kraft takeover of Cadbury was not
without its controversy and this caused the food giant to post a fourth
quarter drop in profits of 24% in 2011. Clearly something fresh was
needed, and this fusion with Oreo may well give the brand the boost it
needs.